The Internal Revenue Service will begin sending out checks this week from those eligible for the expanded 2021 child tax credit.
According to the agency, some 39 million families will be getting their first check from the tax credit that was increased under the American Rescue Plan Act signed into law in March.
The first checks are set to be sent Thursday by direct deposit to bank accounts the IRS has on file for taxpayers and those who do not normally fill out tax returns but who registered with the agency for the payment.
Paper checks will be mailed out as well.
With the payments starting this week, here is what you need to know:
Who gets the payments?
Who is eligible for the child tax credit? You can find out if you are eligible by going to this website and answering a few questions.
Generally, for the 2021 tax year, a taxpayer filing as single will be eligible for the full credit if their adjusted gross income (AGI) is at or below $75,000. For a married couple filing jointly, the income level is at or below $150,000. If you file as a head of household, the income limit is $112,000.
How much will the checks be for?
Most parents will get $300 a month for every child in the household (there is no limit) who is younger than age 6. For parents of children ages 6 to 17, look for around $250 a month.
The payments will begin to phase out for singles earning more than $75,000 and married couples earning more than $150,000. The credit is reduced by $50 for every $1,000 over the income thresholds.
How will you get the payments?
Half of the child tax credit (six checks of $250 or $300) will be sent in monthly installments beginning Thursday then once a month through December.
You will get the rest of the credit next year when you file your income tax return.
The payments will be sent by direct deposit if the IRS has your bank information on file, or by a paper check if they do not.
If you want a lump sum payment to be used on your income tax return next year, you can use this tool to opt out of the monthly payments.
You can also go to the Child Tax Credit Update Portal to check on how your check will arrive in addition to adding or updating direct deposit information.
If you want to opt out of the advance credit, how do you do it?
If you want to stop the advance payments and use the entire credit on your 2021 tax return, you can go to the IRS’s online portal three days before the first Thursday of the next month and opt out.
If you are married and filing jointly, both spouses must opt out of the payments.
What dates will the checks be coming on?
The monthly payments will come on the 15th of every month through December with the exception of August, when it will come on the 13th.
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